A Guide to Direct to Consumer Auto Lending For Dealers
How to replace face-to-face customer relationships with a satisfying digital first experience.
- How COVID has accelerated the shift to digital first
- How Consumers are driving change in auto sector
- Understanding the Buyer’s journey
- How successful Dealerships can 3X online sales
- Partnerships and technology
The Shift to Digital First Auto Sales
According to a Cox Automotive study, two out of three shoppers will likely purchase their next automobile 100% online. In 2020, COVID-19 has accelerated the shift to digital.
Recently Dealertrack reported “Over the past few months, digital solutions have quickly shifted from “nice to have” to “essential” for dealerships. In fact, according to Dealertrack sales and transaction data, between mid-April and mid-July 2020, interest in eContracting grew 94% while the number of contracts signed remotely rose by 97%”.
That’s a massive shift!
Truth is, consumers are driving change across all fronts in the auto industry – from driverless cars to direct to consumer auto sales. Along with almost every other industry, automotive has had to figure out how to replace face-to-face customer relationships with a satisfying digital first experience. To stay relevant with consumers, Dealers have had to adapt fast – with mixed results.
So what does that look like? What should Dealers be paying attention to when crafting a digital first customer experience?
Crafting a Successful Customer Journey Online
The first and most important concept to grasp is the digital-first experience is a customer-first experience. While it may be awkward to stand up and walk out of a dealership, it’s very easy to click off a web page. And that is exactly what a customer will do if the online experience is annoying, repetitive or frustrating.
Every step in the Buyer’s Journey has to be understood through the lens of the customer experience. And not all customers are alike, so having a clear understanding of your target market is a critical first step in a successful digital first strategy.
Let’s talk about websites: It’s time to stop thinking about your website as a storefront. Think of it more as a funnel where you engage your customer at the top, give them all the information they need to make a decision and then provide them with the tools they require to make the purchase on their own terms.
Remember, it’s very easy to lose a customer when all they have to do click off your page! So always give your customer the opportunity to engage with you on their own terms, whether by telephone, SMS text or better yet, on-site chat.
The Role Of Auto Financing In Increasing Online Sales
When it comes to auto financing, the online experience must also be seamless and stress-free. The customer has to be in charge of structuring the deal. You’ll need to be transparent about the different options available and make it easy for them to purchase additional products or aftermarket services like warranties etc.
The evidence is clear: when consumers make their purchase from the comfort of their own living room, they tend to spend more on their vehicle. The more comfortable the customer is, the more money they will spend.
Once a customer is ready to sign, they should be able to do that with an e-signature. So too with fulfilment. Make it easy for the customer to upload the required documentation to take possession of the car.
Finally, the delivery of the vehicle is another area where a dealership can really shine and make it a celebration for the customer.
For after sale service, customer retention campaigns keep the customer engaged going forward: for lease renewal, for servicing and for when it comes time to buy a new car.
The great news for dealerships is that studies have shown that closing ratios double and triple if the customer journey minimizes friction. In other words, if you get the online experience right. You can only do that with an open mindset, the right technology, the right automation – and when necessary, human connection at exactly the right time.
Delivering The Experience: Partnerships & Technology
In order to succeed today, dealerships need to partner with a wide array of forward thinking Lenders who incorporate digital-first financing processes into their online shopping experience. The key to the future is in making savvy technology investments and adapting new processes to bring lending companies and dealerships together, increasing the number of deals you close.
If your Dealership has an in-house financing arm, talk to us about Javelin, our end-to-end lending platform. We’ve designed it from the ground up to offer the kind of flexibility you need to benefit from direct to consumer auto lending.